Should I Incorporate a Business in Canada?

Should I Incorporate a Business in Canada

Here are some key takeaways from this guide:

Frequently Asked Questions

Incorporate a Business in Canada

Should I hire a lawyer to incorporate in Canada?

To ensure full rights under Canadian corporate law, use a lawyer to incorporate. Despite their claims, online incorporation companies cover only about 10% of the process, putting your legal protection and tax benefits at risk.

Learn more about it in our article, “Do I Need a Lawyer to Incorporate?”

Can I incorporate a company by myself?

It is technically possible to incorporate in Canada on your own, but we strongly recommend against it. In our experience, “DIY” corporations are usually incomplete or full of errors that threaten legal liability protection and tax advantages.

How much does a lawyer charge to incorporate a business in Canada?

Depending on the jurisdiction and complexity, incorporating in Canada costs $1500-2500 CAD +HST, covering government and legal fees. Not hiring a lawyer initially can lead to higher costs later to fix errors.

Learn more about it in our article, “How much does it cost to incorporate in Canada?”

What is needed to incorporate a business in Canada?

To incorporate in Canada, you need a unique corporate name, at least one Canadian resident director, a registered office address, articles of incorporation, and a minute book with bylaws, resolutions, and issued shares. A NUANS report is required for name registration. Learn more about incorporation requirements.

When should I incorporate a business in Canada?

The decision to incorporate depends on factors like business age, earnings, and personal finances. Incorporation is often beneficial if there’s liability concern, excess earnings, or future sale plans. It may not be ideal if the risk of being sued is low, you expect losses, or if earnings are minimal after expenses.

Is incorporating worth it in Canada?

Incorporating in Canada offers tax savings, limited liability, income splitting, capital gains exemptions, estate planning, and professional stature. However, it depends on your business’s size and goals. Weigh the pros and cons, as setup and management costs can be high. Consult a business lawyer for advice.

Is it better to incorporate or sole proprietor in Canada?

In Canada, choose a sole proprietorship for simplicity, direct control, and lower costs, ideal for small businesses with low risk. Opt for incorporation for limited liability, tax advantages, and enhanced credibility, suitable for higher income, higher risk, and growth-oriented businesses.

What are the steps to incorporate a business in Canada?

1. Hire a lawyer
2. Choose federal or provincial
3. Check name availability
4. Determine share structure
5. Decide on shareholders, directors, officers, and address
6. File articles of incorporation and get a certificate of incorporation
7. Create a minute book
8. Sign documents and issue shares
9. File initial return

Should I incorporate my business provincially or federally?

Choose federal incorporation for Canada-wide name protection, flexible office location, and international prestige. It requires 25% Canadian directors and takes longer. Provincial incorporation is faster, cheaper, and suits local operations but needs extra-provincial licenses for wider business. Learn more.

Should I incorporate a named corporation or a numbered corporation?

Opt for a named corporation if brand identity is vital for your business, as it allows a unique name. Choose a numbered corporation for a quicker, often cheaper process, if the name is not a priority.

Learn more in our article, “Named or Numbered Corporation?”

Antonio DiMinno

About the Author

Antonio DiMinno is a business & real estate lawyer, entrepreneur, and founder of the law firm, DiMinno Rizzi Lawyers. Antonio takes pride in working differently than most law firms. He doesn’t see himself as just a lawyer, but rather a trusted business and legal advisor in your corner. His focus is helping entrepreneurs and real estate investors through practical, business-savvy, and cost-effective solutions delivered in plain English.

Book a Free Strategy Session with Antonio

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